Thank you very much, Ms. (Maureen) Dougherty.
It is a great pleasure and honor to be here today in our nation’s capital for the American Australian Business Council’s annual CEO Summit and to highlight the findings and recommendations of the important new report that the Council commissioned—"Australia and the United States: State of the Economic Union."
Indiana University’s Kelley School of Business and its Paul O’Neill School of Public and Environmental Affairs were very pleased to have worked with the Council and to have partnered with the United States Studies Center at the University of Sydney in the preparation of this report.
All of us, of course, are aware of reports and strategic planning documents that wind up gathering dust on a shelf. We strongly believe this will not be the case with this report. Its intent, in fact, is to serve as a launching point for future substantive conversation and collaboration between government officials, business leaders, and members of the academic community in Australia and the United States based on the issues and analysis contained in the report.
The extraordinary U.S./Australian alliance
The U.S. and Australia, of course, have a longstanding and extraordinary relationship.
As liberal democracies, the two nations share many foundational values and interests. And as the report highlights, Australia and the United States also have deep, enduring, and extensive economic ties that are, in some cases, unfortunately maybe underappreciated.
The United States is Australia's largest outbound and inbound investment partner and its third-largest trading partner. The two nations also have a $1.1 trillion two-way investment relationship, with the U.S. being the largest source of foreign investment into Australia, and Australian investment into the U.S. valued at $470 billion, the equivalent of 40 percent of Australia’s GDP.
In addition to providing a deeper understanding of the economic impact of the Australia-U.S. relationship, the report also notes the outsized role the Midwest of the United States plays in the American-Australian partnership. Nearly one-third of the value of all American exports to Australia is produced in the Midwest—and Australian firms have, during the last decade, made major investments in the Midwest that have generated nearly $1.6 billion in capital expenditure and created an estimated 2,200 new jobs.
At the same time, the report identifies a number of opportunities for making the Midwestern American-Australian partnership even stronger in the future. The Midwest has eight of the top 12 import clusters from Australia. These include livestock processing, upstream metal manufacturing, food processing and manufacturing, medical devices, and plastics. These and other common economic strengths, as the report notes, suggest that the Midwest is an attractive destination for Australian firms looking to further invest in the United States.
A particularly important part of the report are the case studies of nine flourishing businesses with notable ties in both Australia and the United States that it includes. Among these are the Chicago-based financial services firm, Northern Trust, which, among its other operations in Australia, manages Australia’s Future Fund, the Australian Government’s sovereign wealth fund charged with meeting pension payments to retired civil servants; and the Melbourne-based IFM Investors, which manages 35 pension funds in the Midwestern U.S. through the Indiana Toll Road Concession Company. I am very pleased that Northern Trust CEO Michael O’Grady and IFM Investors CEO Brett Himbury are with us today.
The report also includes a case study of Pratt Industries USA, the largest manufacturer of 100 percent recycled corrugated boxes in the United States. I am very pleased to note that Australian businessman Anthony Pratt, executive chairman of Pratt Industries and a member of the council of advisors of the United States Studies Centre at the University of Sydney, is with us today. Pratt Industries has invested a total of $1.9 billion in the U.S. in the last three decades to build a large network of recycling facilities and manufacturing plants that employ nearly 8,300 workers—including in my own state of Indiana and across the Midwest. The company plans to continue these investments through 2020, creating another 820 jobs.
But in addition to these direct effects, there are also economic indirect "ripple effects" from activities that include supply chain purchases from other U.S. businesses and household spending by workers. In order to estimate the company’s indirect impact in the U.S., Pratt partnered with the Indiana Business Research Council in IU’s Kelley School of Business to produce a brief report, copies of which have also been provided to each of you. In addition to the 8,300 workers Pratt directly employs, the company indirectly supports another 29,500 jobs, bringing its total economic footprint in the United States to nearly 38,000 jobs, which produce more than $2.3 billion in employee compensation.
And, if we were to consider the ripple effects of the activities of all Australian companies in the U.S., the number of jobs supported would easily be in the hundreds of thousands.
As I said, Anthony Pratt, executive chairman of Pratt Industries USA is with us today. Anthony, would you like to make a few comments?
Introducing Simon Jackman
Thank you, Anthony.
Now, to provide additional detail on the report and its recommendations, it is my pleasure to turn over the floor to Professor Simon Jackman, the CEO of the United States Studies Centre at the University of Sydney.
Like me, Professor Jackman is Australian by origin and a citizen of both Australia and the United States, who has worked in both countries during his career. He was a professor of Political Science and Statistics at Stanford University for 20 years before returning to Australia.
Professor Jackman now oversees the policy-focused research of the United States Studies Centre, with a special interest in measuring and analyzing American and Australian public opinion, comparisons of energy policies in the two countries, and studies of investment flows between Australia and the U.S.
With that, I’ll give the floor to Professor Jackman.
Editor's note: Following Professor Jackman’s remarks, President McRobbie offers final thoughts and concludes this portion of the program.
Thank you very much, Simon.
As the report makes clear, and as the tripling of Australian investment in the United States since 2001 underscores, there are many attractive and compelling competitive advantages for Australian businesses investing in the United States.
As you have heard, the report makes a number of important recommendations that will help to expand and strengthen the vital and extensive two-way economic partnership between the United States and Australia.
I want thank all those who contributed to the report, including Simon and his colleague at the United States Studies Centre, senior fellow and senior advisor Jared Mondschein.
And from Indiana University: LaVonn Schlegel, executive director of the Institute for International Business in IU’s Kelley School of Business, and her colleague at the Institute, Suzanne Lodato, Tom Guevara, director of the IU Public Policy Institute in the Paul O’Neill School of Public and Environmental Affairs, as well as Matt Kinghorn, and Carol O. Rogers of the Indiana Business Research Center in the Kelley School of Business.
In addition, I want to express our thanks to all of the American and Australian companies that participated in the production of the report. The nine case studies in the report were made possible through discussions with a number of business leaders in the U.S. and Australia who generously made their time available, and a number of CEOs of these companies are with us today.
As you have heard this afternoon, the report identifies a number of opportunities for future collaboration and mutually beneficial partnership that would strengthen both the American and Australian economies.
I am very pleased to note that, as one immediate next step, the Australian Trade and Investment Commission, or Austrade, and the United States Department of Commerce are planning a series of “road shows” in cities across the Midwest. These will act, in a way, as trade missions, and will serve to highlight aspects of the extraordinary economic partnership between our two nations.
As the report makes clear, while there are many clusters across the United States where Australian direct investment already provides an important economic boost, there are also many underutilized and under-recognized opportunities, including in the Midwest. The Midwest, by virtue of its history of strength in manufacturing, is well-positioned to attract even greater levels of Australian investment in the future.
Greater engagement and collaboration between the United States and Australia is possible because Americans and Australians share a very similar vision for the future of their nations and their communities.
Those of us in higher education want to ensure that a first-rate and affordable education is available to students, an education that allows them to realize their greatest hopes and fuels their economic and career aspirations.
For our communities, we share a vision of more jobs with better pay, enhanced educational and cultural opportunities, and a wider range of career opportunities.
We understand that progress only comes through partnerships with individuals, community organizations, government, and industry. We experience the realities of living in a global economy, and we are prepared to meet the challenges of this changing world through collaboration and innovation.
The presence here today of so many distinguished members of the business community, and of representatives from government and academia, as well as the support of so many others in both the U.S. and Australia, underscores again the strong commitment there is in both countries to these goals and this future.
And I am sure that the American Australian Business Council, under the excellent and knowledgeable leadership of its president, Ambassador John Berry, and its distinguished Board and officers, will play a major role here.
Thank you very much.